Tuesday, February 02, 2010

Two wrongs don't make a right.

So with the American public incensed over bailouts of big auto and various financial companies, a chastened Barry O. figured that the answer must lie in spending even more money we don't have on something for which there is no constitutional authority:

Apparently, if you're in a hole, the solution is to switch your shovel to "Turbo".

The money quote in the piece is this one, however:

"What we're trying to do is to encourage [banks] to get that happy medium where they're not taking such exorbitant risks that they threaten the entire system, but they're also open to enough risk that America's dynamic free enterprise system is actually able to work."

Yeah, Barry, because .gov loans of damp-off-the-presses fiat money are the heart and soul of laissez faire free enterprise. Skipped that day in class, did we?

Great. The last time .gov dumped money into the system for 'Small Business' (a misnomer to be certain...they catagorize it as anything less than 500 employees) lending, including non-gov loans, plummeted, leaving what I consider to be 'small business' (less than 50 employees) in the hole.

As a businessman, I have been paying down my obligations, reducing inventory, and do the other things needed to weather a depression since the day Sillary Clinton called it a race.

The FACT is that there is plenty of money to lend - and no qualified borrowers at any rate of interest.

Unless and until those of us who meet a payroll every week can be assured of a future in business, there will be no qualified borrowers. That is something Obama and the Dimocrats are unwilling to even consider.

Let's see now, we are in this mess because banks gave loans to people in NASCAR hats, so the answer is to lend more money to people in NASCAR hats!

Can we bring the adults back?

Shootin' Buddy

I'm curious as to the frequency of these types of comments. Are you projecting because you live in the Mississippi of the North, or are you just a run of the mill bigot that thinks you're funny? "Just joking" of course being the standard excuse of the bigot...

Either way, per capita default rates heavily lean towards blacks and hispanics (check out the ten year default rates). Not a whole lot of NASCAR fans there. All but two of the top ten foreclosure states are outside of traditional NASCAR country and those two are brought down by the afore mentioned blacks and hispanics.

"The FACT is that there is plenty of money to lend - and no qualified borrowers at any rate of interest."

They didn't worry about even the bare minimum qualifications for the last decade. Now they don't lend to even the most qualified. Ultimately, things like credit ratings are meaningless and the whole thing's a hustle.

Coyote wrote about this issue on his blog. As someone who actually runs a business (unlike yours truly, who plain sucks out loud at being a businessman) I find his analyses of these issues really interesting.

Short version: "The government is considering so much legislation that makes the costs of owning a business so insanely variable that no one with any business acumen is doing anything but battening down the hatches."

No, OA, personal experience. The couple across the street that abandoned their home in the middle of the night and retreated like Bobby Lee back to Ol' Virginny. The Christmas wreath remained on their door until I took it down five months later in April.

That couple wore NASCAR hats . . . continually. The banks are in this mess because they extended loans to people who should not be in houses.

"No, OA, personal experience. The couple across the street that abandoned their home in the middle of the night and retreated like Bobby Lee back to Ol' Virginny. The Christmas wreath remained on their door until I took it down five months later in April.

That couple wore NASCAR hats . . . continually. The banks are in this mess because they extended loans to people who should not be in houses."

Not too many NASCAR hats out here in CA but plenty of foreclosures still,. esp. over in Stockton and up the Central Valley. These were places of little intrinsic value apart from their cheap proximity to Silicon Valley (2-hr commute), that were inflated to Hindenburg and beyond proportions.As a side-effecrt: The Smart Money guys bought multiple no-down, 5-bedroom houses, covered the windows and turned them into a for-profit pot-growing consortium. The incredibly high PG&E electric bills allowed for some Cops to give chase, but most just vanished.